Recovery and beyond

From my conversations with many of you over the last few months, you have more confidence in any increase posted for your businesses now, even if slight, than you did just a year ago.

According to economist Alan Beaulieu, who spoke at last month’s NAFCD conference in Orlando, we’ve been in recovery for three years now. While he said that some 49 percent of the population thinks that we are still in a recession, he’s confident that we’re out, we are in recovery mode. He’s so confident that he told the group here to spend. Invest in technology, social media and efficiencies.

2013 will be a good year, he said. Come 2014, we will see a mild dip. A deeper one is to follow in 2019. He also said that 2029 is set to bring a depression. But let’s focus on the near future. The message: Build your business. “Keep your eye on the ball,” he advised. “Grow your business and get ready for the downturn. 2015, 16, 17 and the first half of 18 are gonna be fun again. The next six years will be vastly different than the last six.”
Beaulieu believes that consumers are spending and a key point is that their liquidity is good. They have cash — $4 billion in cash, he reported. How will you go after that business?

At NAFCD, many distributors said that they have already begun to look at ways to grow. This is an industry that has right-sized, down-sized, consolidated. Risk may be a difficult concept to embrace just yet. And there are areas of concern to keep an eye on — Europe’s financial troubles; what Beaulieu called “massive legislative changes;” oil prices; the fiscal cliff; tax hikes; and, growing national debt. But still, Beaulieu challenged the group to “have confidence and take some risk.”

And some of what Beaulieu suggested investing in, seems to me to simply be good business, regardless of economic times: invest in training people; lock in costs; invest in customer market research (know what they value); judiciously expand credit; review and uncover competitive advantages; spend money on new products; marketing and advertising.
What makes sense for you to invest in? Expansion — Mohawk just expanded its laminate business with the acquisition of Pergo and at press time, was looking closely at Marazzi for potential expansion into tile. Look at your customer service — that was something that saw cuts during the downturn. Product innovation, manufacturing upgrades. These are all critical areas for growth. As well, global expansion — such as Mannington’s purchase of Amtico and Shaw’s new plant in Nantong, China position these companies well for servicing diverse markets.

Take this opportunity to build your business in a way that will withstand the slight dips and give you a strong foundation when the deeper dives come. And then, as Beaulieu suggested, enjoy the good times that are around the corner.